MNC agrees to sell Va. thrift for $52 million Sale is a condition of NationsBank deal

September 18, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

MNC Financial Corp., the parent of Maryland National Bank, yesterday signed a definitive agreement to sell its Virginia Federal Savings subsidiary for $52 million in cash to Crestar Financial Corp. of Richmond.

The sale of the thrift, with $756 million in assets, fulfills a requirement that regulators had set for the acquisition of MNC by NationsBank Corp. of Charlotte, N.C. The Federal Reserve Board had said the merger would have exceeded Justice Department guidelines for market concentration in Charlottesville and Orange County, Va., where Virginia Federal has branches.

"With that sale, there will be no further divestiture required," said Mary M. Waller, a spokeswoman for NationsBank.

MNC, is due to merge with NationsBank, the country's fifth-largest banking company, next month. The banking company has agreed to pay $1.4 billion in cash and stock for MNC, Maryland's largest bank holding company.

MNC acquired Virginia Federal in December 1988 with the assistance of the Federal Home Loan Bank Board, the federal agency that regulated thrifts at that time. Virginia Federal had negative net worth of $13.2 million.

But the acquisition by MNC restored the thrift to financial health and the savings and loan now exceeds capital ratios set by federal regulators. "Its a healthy, profitable, well-capitalized institution," said Barry R. Koling, a spokesman for Crestar.

Crestar, which has $13.2 billion in assets, said it expects to complete the acquisition of Virginia Federal by the end of the year. Virginia Federal has 13 branches.

Mr. Koling said some branches may be closed to consolidate with Crestar operations before the end of the year. But he said a decision has not be made on how many or where.

Crestar has 302 branches in Virginia, Washington and the Maryland suburbs of Washington. The purchase of Virginia Federal should provide a 15 percent return on Crestar's investment, according to John W. Coffey, a bank analyst for Robinson-Humphrey Co. Inc., a regional investment banking firm in Atlanta.